The Australian Financial Complaints Authority (AFCA) has ruled an insurer misled a complainant in annual statements mailed to him, by failing to state in the documents that he will not be covered for heart attacks after age 70. 
 
However, AFCA says Resolution Life Australasia is not required to pay the trauma benefit he was seeking as the “misleading conduct” did not lead him to miss out on a benefit he would otherwise have been paid. 
 
The insurer is only required to refund all trauma premiums paid after the first policy renewal date following the complainant turning 70, and also compensate him $1000 for non-financial loss. 
 
The dispute was triggered after the claimant made a claim on his trauma policy following a heart attack on July 17 2020. 
 
But his claim was declined as his policy did not cover for heart attacks since he has turned 70, the insurer says. His policy only covers for loss of capacity for independent living, or LOCFIL, once he reaches that age threshold. 
 
The complainant disputed the insurer’s decision and relies on annual statements sent to him after he turned 70 but before his heart attack, which show no changes to his trauma cover and no reduction in premiums. 
 
AFCA says the annual statements should have said that the ongoing cover was reduced to cover for LOCFIL, but points out the original policy document did state heart attacks are not covered after the first policy renewal following the insured person turning 70. The policy commenced in 2012. 
 
“The annual statements sent after the complainant turned 70 did not change the policy to provide ongoing cover for heart attacks,” the AFCA ruling says. 
 
In the original policy documents it was stated that a range of medical conditions – trauma events – are covered, including heart attacks and LOCFIL. 
 
It was also stated that the trauma event (except loss of capacity for independent living) must occur before the first renewal date after the person insured turns 70. 
 
“It follows that, under the terms of the original policy document, the complainant was not covered for heart attacks after that,” AFCA says. 
 
AFAC also says the annual statements must be read in conjunction with the policy document. 
 
“The things pointed out by the complainant are not sufficient to overcome the terms in the policy 
document which clearly limit the trauma cover to LOCFIL cover from the first renewal date 
after the insured person turns 70,” AFCA says. 
 
AFCA says that although the complainant was misled, he did not “miss out” on any benefit because there is nothing to suggest he would have been able to source cover elsewhere. 
 
It says the insurer should pay $1000 in non-financial loss compensation because it "took months following the insurance claim to clearly explain its position, and to partially refund premiums. That is too long.” 
 
Click here for the ruling.